TECHNOPOLIS PLC PRESS RELEASE May 10, 2016 at 9.10 a.m.
Steady Start to Year – Technopolis Keeps Focusing on Its Core Strengths
The first quarter of 2016 was solid for Technopolis despite the expected drop in occupancy in Oulu. Without currency impact, the company’s net sales grew 1.4% while EBITDA was up 0.5%. EBITDA included a EUR +0.8 million one-off, and the EBITDA margin came in at 53.3 % (53.9 %). The financial occupancy declined to 92.5% from 94.6% in Q4 2015 due to a 7.3% drop in Oulu occupancy.
Key Developments of First Quarter
In Oulu, Technopolis’ challenge is now to find customers for the 15,800 m² of office space released from the agreements that the company prematurely terminated in 2015. To put this into perspective, in 2015 the company did over 24,000 m² in new deals in Oulu and in 2016 so far another 9,700 m². Keith Silverang, CEO of Technopolis, says the company will achieve equilibrium in Oulu. “We must be successful in our sales efforts, but we must also reduce capacity in Oulu. This process may take a couple of years.”
Technopolis has also had positive developments in the first months of the year. Service business grew by 14.5% and service penetration reached 12.6%. In Tallinn, the company completed the new Lõõtsa 5 building with a 100% occupancy rate. In April, Innopoli 3 in Espoo received a LEED Gold certificate, and in May the flagship of Technopolis’ coworking chain, UMA Esplanadi, was opened in downtown Helsinki.
Technopolis will continue to focus on its core strengths, according to Silverang. “Whatever the conditions we will stay focused on operational excellence, superior customer service and cost-efficiency in order to enhance our competitive advantage. We will continue to build our service penetration, and expand our network of shared working environments under the Technopolis brand”, says Silverang.
Growth on the Horizon
Technopolis has a clear growth strategy of expanding both organically and through acquisitions. “It has been a bit challenging for us to execute this strategy fully since the transaction market is overheated and shows no signs of cooling down. The interest rates in Europe are expected to stay low, which means that a lot of capital is looking for yield from properties,” says Silverang.
However, Silverang sees growth possibilities on the horizon. “Despite the challenges, there are opportunities on our target markets that offer excellent strategic fit and good risk adjusted returns. We will continue to be disciplined in our pursuit of deals and we will not stray from our investment criteria. As for divestitures, the appetite among both foreign and domestic investors in the Finnish real estate market still appears to be increasing and gradually expanding outside prime locations.”
Silverang highlights that Technopolis will continue to grow organically. “The pre-let rates of our current projects grew nicely in Tampere and Vilnius during the first quarter of 2016, and we have good opportunities to expand the project pipeline. In Helsinki, we have begun preparing for the launch of the third phase of our Ruoholahti campus.”
Technopolis Interim Report 1-3/2016 available at www.technopolis.fi/investors.
For more information, please contact:
Keith Silverang
CEO
Tel. +358 40 566 7785
Technopolis provides the best addresses for success in five countries in the Nordic-Baltic region. The company develops, owns and operates a chain of 20 smart business parks that combine services with flexible and modern office space. The company’s core value is to continuously exceed customer expectations by providing outstanding solutions to 1,700 companies and their 47,000 employees in Finland, Norway, Estonia, Russia and Lithuania. The Technopolis Plc share (TPS1V) is listed on Nasdaq Helsinki.